Internet companies will soon have to find a way to protect user privacy to avert a "clash" which could lead to increased government regulation, eBay chief executive John Donahoe said Wednesday.

"There's going to be, at some point in the next few years, a trigger point," Donahoe told a New York breakfast meeting organized by The Wall Street Journal, noting the need for "a national dialogue about what is acceptable or not."

Donahoe said it would be best for the industry to take "proactive" steps to avoid a backlash.

"It's going to be necessary for us to have some national dialogue on privacy, so we don't have a clash point and they over regulate and slow down innovation," he said.

He said eBay's business model does not revolve around monetizing data but that this has become a greater concern for Web companies.

"We won't share your information with anyone else, but I think there are huge opportunities to use data, to customize the experience, to personalize the experience, and if you choose to share with others, it can make the experience even better," he added.

Donahoe said users of eBay should know that "there's no absolute guarantee of privacy" for illegal activity and that "we can't stop a court order."

"We comply with the laws of the lands we operate in and we don't operate in lands where we wouldn't feel good about the laws," he added.